The new big hit?

With sales on the upswing, importers of luxury cars are expecting an even better year.

The Jaguar F Type S convertible model. (photo credit: REUTERS)
The Jaguar F Type S convertible model.
(photo credit: REUTERS)
What was supposed to be a year of tightening our belts and austerity, in the end, 2013 didn’t turn out too poorly for the Israeli economy or for the average family. The social protests may not have completely disappeared, but at least in the automobile market, it seems like everyone who can afford to let his belt out a notch has not hesitated to do so.
Despite gloomy forecasts, not only did the Israeli automobile market not contract this year, it expanded by 3 percent. It’s now official: more than 200,000 new cars have taken to the roads in Israel this year alone. Although the lion’s share of these cars were imported for leasing agencies, a few niche areas have recently become more popular with private buyers. Sales to individuals of small jeeps and crossovers have increased significantly.
But another niche that absolutely skyrocketed this year is luxury cars. Between January and November, sales rose 21 percent. The numbers don’t lie, thousands of private customers are now willing to pay more in order to enjoy the feeling of driving a luxury car.
Most private buyers in Israel purchase one of the 120,000 used cars that leasing companies resell each year. The sales of luxury cars in Israel increased this year across the board, and some companies such as Mercedes and Audi had their all-time best year in the history of automobile sales in Israel. Lexus expects sales to double in 2014 and reach 1,000 units a year.
There are two main reasons why more people are now buying luxury cars than in the past. The first and more important reason is that a much larger variety of models is now available. A decade ago, there were only three or four types available, whereas today there is a plethora of companies and each one offers a variety of models. And each year, a new niche within the luxury market pops up.
Mercedes, BMW and Audi no longer limit the models available to cars that cost more than half a million shekels. Instead, they are also importing compact cars and superminis that sell for under NIS 200,000.
In the past, individual buyers who did not find what they were looking for when they visited importers’ showrooms, did not settle for less or decide to take the bus to work instead. What they did was import cars privately, thereby circumventing the importers. Now, luxury car importers are making an effort to conquer this niche too.
The luxury car importers in Israel have gone to great lengths to forge connections with their clients and in doing so receive their loyalty.
For example, Mercedes chose to offer free desserts to clients when they eat in restaurants, to send them wine and flowers on their birthdays, to assist them in booking trips overseas and to help them investigate transportation options while on these trips.
Audi, on the other hand, decided to go another route. It organizes grand entertainment packages for their clients for free. All the luxury car importers in Israel – from Lexus to Infiniti, from Jaguar to Land Rover – are putting lots of effort and cash into finding a unique and exciting way to draw in new customers and retain old ones.
If 2014 turns out to be economically stable, the Israeli luxury car industry will probably continue to grow at lightning speed. Each manufacturer has promised that new models will become available and the trend we saw in 2013 will most likely continue even stronger.
It appears that as soon as Israeli consumers were able to break through the psychological barrier that held them back from buying luxury cars, they dived in head first. Many Israelis, it seems, are willing to spend not so small sums of money just so they can be counted among the (not for much longer) few who own one of the best cars money can buy.
Translated by Hannah Hochner.